- 1 - HC-KAR NC: 2025:KHC:36352 WP No. 9258 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12TH DAY OF SEPTEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE RAVI V HOSMANI WRIT PETITION NO. 9258 OF 2024 (EXCISE) BETWEEN: SRI H.S.KRISHNAMURTHY, S/O H.D.S. NAIK, AGED ABOUT 58 YEARS, R/A NO.203, OM SAI SAPPHIRE APARTMENT, GOVINDAPPA LANE, 5TH CROSS, KODIHALLI, BENGALURU - 560 008. …PETITIONER [BY SRI D.R.RAVISHANKAR, SR. COUNSEL FOR SRI ANOOP HARANAHALLI, ADVOCATE (PH)] AND: 1. COMMISSIONER OF EXCISE, GOVERNMENT OF KARNATAKA, 2ND FLOOR, BMTC TTMC BLDG., 'A' BLOCK, SHANTINAGAR, BENGALURU - 560 027. 2. DEPUTY COMMISSIONER OF EXCISE, BENGALURU URBAN (BUD-5), BENGALURU - 560 002. Digitally signed by GEETHAKUMARI PARLATTAYA S Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:36352 WP No. 9258 of 2024 3. M/s. KUMAR ENTERPRISES PARTNERSHIP FIRM, NO.343, 9TH MAIN, SECTOR-VII, HSR LAYOUT, BENGALURU - 560 102, REP BY ITS PARTNER SRI BHARATH S. KUMAR. …RESPONDENTS [BY SRI G.K.BHAT, SR. COUNSEL FOR SMT. D.SUDHA, ADVOCATE FOR R3 (PH); SRI BHOJEGOUDA T. KOLLER, AGA FOR R1 & R2 (PH)] THIS WRIT PETITION IS FILED UNDER ARTICLES 226 OF THE CONSTITUTION OF INDIA, PRAYING TO A) QUASH THE IMPUGNED ORDER DATED 21.03.2024 PASSED BY THE R1 IN APPEAL NO.ECS/81/APPLICATION/2021 AT ANNEXURE-A, B) QUASH THE IMPUGNED ORDER DATED 07.12.2021 BEARING NO.EXE/BDA-5/VALAYA-31/ML/15/2020-21 AT ANNEXURE-G. THIS PETITION IS HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 04.09.2025, THIS DAY, THE COURT, PRONOUNCED THE FOLLOWING: - 3 - HC-KAR NC: 2025:KHC:36352 WP No. 9258 of 2024 CAV ORDER Challenging order dated 21.03.2024 passed by Respondent no.1 in Appeal no.ECS/81/APPLICATION/2021 at Annexure-A and order dated 07.12.2021 passed by Respondent no.2 bearing no.Exe/BUD5/Valaya-31/IML/15/2020-21 at Annexure- G, this writ petition is filed. 2. Sri DR Ravishankar, learned Senior Counsel appearing for Sri Anoop Haranahalli, learned counsel for petitioner submitted, petitioner was holder of CL-9 with attached Retail Vend of Beer licence for his premises at no.88, Sy.no.97, Inorbit Mall, Second floor, EPIP area, Hoodi village, KR Puram Hobli, Bengaluru East, Bengaluru. On 14.08.2020, he had submitted an application before respondent no.1 requesting for transfer of licence to respondent no.3 - Firm, as per Annexure-C1 ('Application', for short). Application was filed along with requisite transfer fee and additional licence transfer fee paid vide challan dated 20.08.2020. Said application was filed under Rule 17-B of Karnataka Excise (General Conditions of Licences) Rules, 1967 ('Rules' for short). It was submitted, proposal was forwarded for prior approval of respondent no.1, on 31.08.2020. - 4 - HC-KAR NC: 2025:KHC:36352 WP No. 9258 of 2024 3. But, on 01.09.2020, petitioner filed complaint before respondent no.2 alleging that respondent no.3 had not paid complete consideration amount. Similar complaint was filed by petitioner's wife before respondent no.1 on 21.09.2020. A complaint was also filed before Police. In response to said complaint, respondent no.2 issued Endorsement dated 05.12.2020 as per Annexure-E3, informing petitioner and respondent no.3 that Application would be considered only after they had sorted out their differences and filed fresh application for transfer. 4. Such being case, respondent no.3 filed WP no.13507/2020 without adding petitioner as party seeking for direction to respondents to consider Application. Said writ petition was disposed of on 18.12.2020 directing respondent no.2 herein to consider and directing respondent no.1 to cause consideration of Application within period of two weeks. It was submitted, respondent no.3 had failed to bring to notice of this Court that under Endorsement at Annexure-E3, Application stood disposed of and parties were required to file fresh application. - 5 - HC-KAR NC: 2025:KHC:36352 WP No. 9258 of 2024 5. Thereafter, respondent no.2 passed order dated 11.01.2021 as per Annexure-E7, transferring petitioner's licences in favour of respondent no.3. Said order was challenged by petitioner in WP no.2756/2021. Same was allowed on 21.06.2021 as per order at Annexure-F, both on ground that petitioner was not heard before passing order as well as on ground that Application stood rejected as per Annexure-E3 and reserving liberty to respondent no.3 herein to challenge same. Liberty was also reserved to petitioner to support his application for withdrawal of Application. 6. Aggrieved thereby, respondent no.3 filed WA no.794/2021, but same was dismissed by Division Bench of this Court on 07.09.2021, under order at Annexure-F1. Thereafter, respondent no.2 sought to hold proceedings for consideration of petitioner's request for withdrawal of Application and passed order dated 07.12.2021 as per Annexure-G holding that once an application for transfer of excise licences were filed along with requisite fee, it could not be withdrawn. Said order was challenged by petitioner in Appeal no.81/2021 before respondent no.1. By order dated 08.06.2023 at Annexure-G4, Appeal was dismissed and challenged by petitioner before - 6 - HC-KAR NC: 2025:KHC:36352 WP No. 9258 of 2024 Karnataka Appellate Tribunal ('Tribunal' for short) in Appeal no.238/2023. 7. During pendency of said appeal, as there was refusal to renew licence, WP no.14129/2023 was filed. Same was however disposed of on 04.08.2023 relegating petitioner to pursue pending appeal before Tribunal. Thereafter, by order dated 30.10.2023 at Annexure-J, appeal came to be allowed, order at Annexure-G4 was set-aside and matter remitted back to respondent no.1 to pass orders afresh after giving opportunity to both parties. 8. Learned Senior Counsel pointed out to specific finding by Tribunal that wordings of Endorsement at Annexure- E3 could only mean that Application was not in force and fresh application was required to be filed. It was submitted, said order had attained finality. In pursuance of same, however, parties appeared before respondent no.1. Despite petitioner specifically pointing out import of Endorsement at Annexure-E3, as noted by Division Bench of this Court as well as specifically spelt by Tribunal that Application cannot be held to be in force available for consideration and liberty was reserved to respondent no.3 to challenge Annexure-E3, but not challenged - 7 - HC-KAR NC: 2025:KHC:36352 WP No. 9258 of 2024 by respondent no.3, respondent no.1 proceeded to pass impugned order dismissing appeal, rejecting petitioner's application for withdrawal of Application and allowing Application for transfer of Excise licences in favour of respondent no.3. Aggrieved by said order dated 21.03.2024 at Annexure-A, this writ petition is filed. 9. Relying upon decision of Hon'ble Supreme Court in case of Hope Plantations Ltd., v. Taluk Land Board, Peermade & Anr. reported in (1999) 5 SCC 590, it was submitted, in course of proceedings leading to impugned order, firstly, this Court in its order at Annexure-F; secondly, Division Bench in order at Annexure-F1 and thirdly, Tribunal in its order at Annexure-G4 had held by virtue of Endorsement at Annexure-E3, Application could not be treated as in force. It was further submitted, though liberty was specifically reserved in order at Annexure-F to challenge endorsement at Annexure- E3, respondent had failed to question same and as such estopped from pursuing/persisting for consideration of Application or for seeking rejection of petitioner's application for withdrawal of Application. - 8 - HC-KAR NC: 2025:KHC:36352 WP No. 9258 of 2024 10. It was further submitted main reason for dispute arising between petitioner and respondent no.3 in relation to transfer of licences was that petitioner was not paid consideration amount agreed to be paid, and respondent no.3 had sought to defraud petitioner of consideration amount by firstly, promising to pay same and later claiming to have paid it in cash even though it was far beyond permissible limit for transaction in cash. Referring to decision of Hon'ble Supreme Court in case of Correspondence, RBANMS Educational Institution v. B Gunashekar & Anr. reported in 2025 SCC OnLine SC 793, it was submitted, if respondent no.3 persisted with claim to have paid part of consideration of Rs.1 Crore 35 Lakhs to petitioner in cash, that too before Excise Authorities, then there would be need for intimation to Income Tax Authorities for verification of transaction. 11. Learned Senior Counsel also contended, though in muffled voice that Application filed was invalid/defective and hence its rejection was justified. On above grounds, sought for allowing writ petition. 12. On other hand, Sri GK Bhat, learned Senior Counsel appearing for Smt.D Sudha, learned counsel for respondent - 9 - HC-KAR NC: 2025:KHC:36352 WP No. 9258 of 2024 no.3 opposed writ petition. It was submitted, in terms of a Memorandum of Understanding ('MoU' for short) dated 18.05.2020 at Annexure-C, petitioner had agreed to transfer his CL-9 and RVB licences in favour of respondent no.3 for total consideration amount of Rs.2 Crores and 75 Lakhs and had received advance amount of Rs.1 Crore and 40 Lakhs at that time. It was submitted, on 14.08.2020, as admitted, petitioner filed Application along with necessary documents and transfer fee. Petitioner had received balance amount at time of filing Application. But on 05.09.2020, filed false complaint before respondent no.2 alleging that he was fraudulently induced to file Application. 13. It was submitted, Rules provided for transfer of Excise licences as per Rule 17-B. Said Rule stipulated two requirements, firstly, about application being accompanied with transfer fee and secondly, verification about transferee not being ineligible. In view of above, once an application for transfer were filed, there would be no scope for authorities to enquire into disputes about payment/non-payment of consideration for transfer nor entertain any complaint about same. They would be mandated to consider application in - 10 - HC-KAR NC: 2025:KHC:36352 WP No. 9258 of 2024 accordance with law and on application being found compliant with requirements, proceed with transfer and leaving it to disputing party to settle dispute before appropriate forum. 14. It was submitted, referring to above position in law, respondent no.2 had passed order at Annexure-G4 allowing Application and rejecting petitioner's application for withdrawal of Application. Same was duly appreciated even by respondent no.1, who also considered grounds urged by petitioner and dismissed appeal. 15. Learned Senior Counsel further submitted that none of decisions relied upon by petitioner were relevant nor decided question whether an application for transfer of Excise licences once filed could be withdrawn on any ground whatsoever and whether Authorities under Act were authorized to entertain and/or deal with disputes about non-payment of consideration for transfer. Therefore, on above grounds, sought for dismissal of writ petition. 16. Learned AGA for respondents no.1 and 2 supported impugned order. 17. Heard learned counsel and perused material on record. - 11 - HC-KAR NC: 2025:KHC:36352 WP No. 9258 of 2024 18. From above, it is seen, petitioner's grievance against order impugned at Annexure-A is that it was passed without due appreciation of specific contentions urged by petitioner relying upon observation/finding about consequence of respondent no.2 issuing Endorsement at Annexure-E3 and failure of respondent no.3 in challenging same despite specific liberty being reserved. While respondent no.3 seeks to contend that an application for transfer of excise licence once filed, could not be withdrawn for any reason whatsoever. 19. Prima facie, generally any person who files any application before any authority would be vested with right to withdraw same, unless provisions of law would provide that filing of application would result in applicant divesting himself of right to withdraw or where filing of such an application is on receipt of consideration rendering it irrevocable as recognized by Hon'ble Supreme Court in case of 'transfer' of immovable property by execution of General Power of Attorney coupled with consideration in Suraj Lamps and Industries Pvt. Ltd. reported in (2012) 1 SCC 656. 20. Indeed, as rightly contended by learned Senior Counsel for respondent no.3, Rules do not provide or recognize - 12 - HC-KAR NC: 2025:KHC:36352 WP No. 9258 of 2024 transfer based on consideration. They do not require parties to state reason for transfer or furnish documents in that regard. Therefore, authorities would not be authorized to decide dispute about payment/part-payment/non-payment of consideration. 21. At same time, there is no express prohibition against filing of application for transfer of excise licences for consideration. In other words, burden to establish that filing of application was for consideration whether paid or promised in order to render filing of application irrevocable, would be on person asserting it to be so. 22. Besides, in instant case, after filing of application at Annexure-C1, complaints were filed with respondents no.1 and 2 alleging that petitioner was fraudulently induced to file Application. On consideration of same, respondent no.2 had issued Endorsement dated 05.12.2020 at Annexure-E3, directing parties to sort out their differences elsewhere and thereafter file fresh application for. In writ petition filed challenging said order, this Court in its order at Annexure-F had noted effect of said endorsement would be that Application could not be treated as pending and liberty reserved to respondent no.3 to challenge endorsement. Said observation - 13 - HC-KAR NC: 2025:KHC:36352 WP No. 9258 of 2024 received confirmation in order at Annexure-F1 with dismissal of Writ Appeal. Said aspect was specifically highlighted by Tribunal in it's order at Annexure-J. 23. Admittedly, petitioner has not challenged endorsement at Annexure-E3. Resultantly, respondent no.3 would be unable to pursue his claim based on Application, without establishing that it was irrevocable due to passing of consideration (either in full or part) or otherwise. Even, contention of respondent no.3 based on MoU would not hold good for two reasons. Firstly, an MoU being only an agreement to enter into agreement, would not be enforceable and secondly, even if it is contended that same is a complete agreement; for want of payment of necessary stamp duty/registration. 24. While passing impugned order, after adverting to rival contentions, respondent no.1 observed that transfer of licence is akin to transfer of property and filing of application as being similar to process of registration and as such, irrevocable. It is also observed that permitting withdrawal of application would set wrong precedent and uncertainty in mind of transferee. It is also stated that Department cannot delve into - 14 - HC-KAR NC: 2025:KHC:36352 WP No. 9258 of 2024 disputes 'after transfer'. And, virtually holding that once both parties appear before Authorities and affix their consenting signatures and Department accepts genuineness of transfer application, process would be complete. Respondent no.1 has also held petitioner had failed to approach appropriate forum to have financial dispute resolved. 25. Firstly, licence under Rules is only a privilege and not property having due deference to decision in case of M/s. Khoday Distilleries Ltd. v. State of Karnataka & Ors. reported in (2017) 6 KLJ 507, wherein it is held that no person can claim right to trade in liquor as a matter of right. 26. Secondly, filing of application for transfer would be conclusive insofar as applicant only after it's acceptance and passing of order for transfer. Therefore, mere filing of application cannot be held to be conclusive. Said reasoning by respondent no.1 would be unsustainable. 27. While, respondent no.1 rightly held that Excise Authorities cannot delve into disputes about consideration, it would not be justified in requiring applicant to approach other forum and establish claims about consideration, as it would be on person staking his right in pursuance of application for - 15 - HC-KAR NC: 2025:KHC:36352 WP No. 9258 of 2024 transfer to have his claims against applicant adjudicated prior to approaching authorities for effecting transfer. 28. For aforesaid reasons, writ petition succeeds, impugned orders dated 21.03.2024 passed by respondent no.1 in Appeal no.ECS/81/APP/2021 at Annexure-A and order dated 07.12.2021 passed by respondent no.2 bearing no.Exe/BUD5/Valaya-31/IML/15/2020-21 at Annexure-G would be unsustainable in law and therefore quashed. Sd/- (RAVI V HOSMANI) JUDGE AV List No.: 1 Sl No.: 57